If an inherited home is titled in your name but the mortgage is not, what would the penalties/repercussions be from a foreclosure?

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If an inherited home is titled in your name but the mortgage is not, what would the penalties/repercussions be from a foreclosure?

I live in CA, where my mother passed away a couple years ago. My younger brother and I inherited a house in NV. The renter pays for the mortgage, property taxes, and insurance, but the maintenance is too much for us. The initial loan for it was $250k. There is $164k left to pay. The property is now worth $70k. Totally underwater and we cannot afford this. Although our name is on the grant deed, we have not accepted the loan it is still in my mother’s name. I think our best option is foreclosure. Will this negatively effect us or will it be in my mother’s name?

Asked on April 15, 2011 under Real Estate Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The lender can not report the foreclosure to a credit agency in your name but it is still not a good idea here to let this sit as it is.  I am surprised that the lender did not call in the loan when your mother dies so I am thinking that maybe someone forgot to notify them, and if you distributed funds in the estate before paying off a secured debt then I might be concerned as well.  Go and speak with a real estate attorney in the area that the house is located in.  Discuss your options rather than foreclosure, which is an expensive process that the lender would rather not go through.  Ask about a short sale and a deed in lieu of foreclosure.  Make sure that a deficiency against the estate is waived.  Good luck.


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